Companies that cut costs by freezing salaries, laying off staff, reducing bonuses and not hiring during the global financial crisis are now struggling to attract talented employees and keep current workers happy, a new survey reveals.
“Even in relatively soft economies, top employees are in short supply. Add to that, workers today simply are in no rush to seek employment elsewhere, given the uncertainty over economic recovery,” said Laura Sejen, global head of rewards consulting at Towers Watson, in a statement.
Nearly two-thirds of companies surveyed worldwide and more than half of businesses surveyed in the United States report having problems finding employees with critical skills, according to the Towers Watson and WorldatWork survey of 1,176 companies in 23 countries, including 314 from the United States. Companies (61 percent globally and 45 percent in the U.S.) also say they aren’t successful in scooping up top-performing candidates.
Recent Labor Department statistics confirm that employers are beginning to search harder for employees. The department’s Job Openings and Labor Turnover survey, reported the number of jobs advertised rose by 6.2 percent in July. But, competition for those jobs remains stiff. In July, 4.8 unemployed people, on average, were vying for each opening. That number peaked at 6.3 job hunters for every open job advertised in November 2009.
The Towers Watson study also discovered that cost-cutting measures took their toll on current workers. Three-fifths of the respondents said cuts increased employees’ workloads and more than half said they adversely affected employees’ ability to manage work-related stress . Half also said the cuts had a negative impact on employee engagement and workers’ ability to balance their work and personal lives.
U.S. businesses took the most aggressive measures, with more than 60 percent implementing at least four cost-cutting actions.
As a result of diminished morale and unsuccessful recruiting, companies want to re-evaluate ways to attract, retain and motivate employees. About half of the respondents said creating more movement, rotation and development opportunities for talent was a top priority.
“This study is a good reminder that employers need to reassess their employee value proposition to key in on those factors, both tangible and intangible, that would make them attractive to recruits,” said Ryan Johnson, vice president of publishing and community for WorldatWork. “This is even more critical when luring top talent for leadership roles.”